The Secretary of State may, after consultation with a housing association, determine to commute any payments of special residual subsidy payable to the association under paragraph 2 of Part I of Schedule 5 to the M1Housing Associations Act 1985 for the financial year 1998-99 and subsequent years.

Where the Secretary of State makes such a determination the payments of special residual subsidy payable to a housing association shall be commuted into a single sum calculated in such manner, and payable on such date, as the Secretary of State may consider appropriate.

If after a commuted payment has been made to a housing association it appears to the Secretary of State that the payment was smaller or greater than it should have been, the Secretary of State may make a further payment to the association or require the association to repay to him such sum as he may direct.

The Secretary of State may delegate to the Housing Corporation, to such extent and subject to such conditions as he may specify, any of his functions under this section and, where he does so, references to him in this section shall be construed accordingly.